LONDON (Reuters) - Sales of vaccines, once considered a commodity market, are booming with global revenues set to reach nearly $10 billion in 2006 from $5.4 billion in 2001, according to research published Tuesday.

Analysts at Merrill Lynch said the fastest growing section of the market would be for flu vaccines, sales of which are expected to more than double to $2 billion in the next five years.

Much of the flu vaccine market's 16 percent compound five-year growth will be driven by the entry of MedImmune Inc. (MEDI: Research, Estimates)'s premium priced nasal spray FluMist, which will be co-marketed by Wyeth (WYE: Research, Estimates).

The launch of FluMist later this year, coupled with increasing demand for pediatric vaccines, could see the overall market leap by 20 percent in 2003 alone. Growth is then expected to moderate to an annual 10 percent from 2004 to 2006.

Merrill's projection of 13 percent compound five-year sales growth for the total vaccine market compares with global drug sales growth of just eight percent in the year to October, 2002, according to healthcare information firm IMS Health.

The infant sector currently makes up the largest section of the vaccine market, with 2001 sales of $2.5 billion, but adult demand is growing as governments actively promote flu shots for the elderly and more vaccines are used by tourists.

At the same time, the threat of bioterrorism after the Sept. 11 attacks on the United States has spawned a new business in supplying vaccines against smallpox following fears the deadly virus might be used as a weapon.

The global vaccines market is currently dominated by four large pharmaceutical companies -- Aventis SA (AVE: Research, Estimates), GlaxoSmithKline Plc (GSK: Research, Estimates)., Wyeth and Merck & Co. Inc (MRK: Research, Estimates). -- which together account for almost 85 percent of sales.

But a number of smaller companies are also carving out a niche, including Britain's PowderJect Pharmaceuticals Plc. and Acambis Plc (ACAM: Research, Estimates)., Switzerland's Berna Biotech and Chiron Corp (CHIR: Research, Estimates). of the U.S.

Merrill said it had initiated coverage of PowderJect with a "buy" recommendation, reflecting its strength in flu and travel vaccines, while Berna Biotech was started as "neutral."

Acambis, however, was rated a "sell." The brokerage predicted it would start losing money in 2005, after a period of profitability on the back of U.S. government contracts for smallpox vaccine.